Monitor for Circular Fashion Launches Eight Pilot Tests

Concrete application of sustainability principles, common standards for traceability, implementation of eco-design projects. These are the evidences that appear in the second edition of the Monitor for Circular Fashion's annual report and that show the fashion industry's roadmap toward a future more compliant with circular economy principles. The Monitor, which is part of the SDA Bocconi Sustainability Lab and powered by Enel X, Enel's global business line dedicated to innovative services, is an observatory created in 2020 with the aim of offering a constantly updated representation of the sustainability of the Italian fashion system by identifying the main qualitative and quantitative indicators (KPIs) of circularity, evaluating business models and their applications.

For the 2022 edition of the Report, the Monitor for Circular Fashion involved its stakeholder community in the analysis of two factors in particular: sustainability claims and the key principles of eco-design and their implementation in value chains.
The Report outlines the ideal characteristics of a sustainability claim implemented in the pilot projects, starting with United Nations Economic Commission for Europe (UNECE) guidelines:

The ultimate goal of a circular approach is to keep products and materials in use while preserving their quality and minimizing their environmental impact throughout their life cycle. To achieve this, the Monitor, consistent with the European Commission's as-yet-unspecific "Ecodesign for Sustainable Products Regulation" proposal, has identified 10 key principles to be applied and implemented when designing a circular fashion product, gathering them into three macro-categories: life cycle (durability, reusability, reparability, recyclability), health and safety (use of chemicals, release of microfibers) and sustainable inputs (use of renewable, recyclable or recycled inputs, efficient use of resources...)

"Managing sustainability and circularity requires a holistic approach: focusing only on the end of life would be a mistake that reinforces the linear system," comments Francesca Romana Rinaldi, Director of the Monitor for Circular Fashion SDA Bocconi School of Management. "The implementation of eco-design principles along circular fashion value chains is the real opportunity we have to accelerate the green transition in the coming years. Consistent with the work done in the first two years, the Monitor for Circular Fashion will continue to welcome companies that wish to anticipate and drive sustainable and circular change in Textile, Apparel, Leather and Footwear value chains, starting with traceability and supply chain transparency."

"For the second year we are presenting the results of the Monitor for Circular Fashion, which has become a most successful tool for adequately measuring the levels of circular maturity of the most important companies operating in fashion, a crucial sector for this country," said Nicola Tagliafierro, Head of Sustainability at Enel X. "The evidence tells us that fashion companies are increasingly moving towards business choices in line with the ecological transition, but there is still much to be done in terms of energy efficiency and self-generation from renewable sources, both segments in which Enel X represents a reference of excellence and innovation for the entire market."

For the first time, this framework of principles was tested and validated by comparison with eight circular product pilot projects from Monitor community companies.

• Think Leather (Holding Moda/Gab Group/Quid). Scraps from leather processing are transformed into small leather goods (pen holders, pc/document cases...), made with few components by a social enterprise that promotes inclusive employment and creates empowerment opportunities for vulnerable people.
• Eco-designed Jeans (Kering/Candiani Denim). Example of a supply chain collaboration to create denim jeans made from 100 percent certified organic cotton, conceived according to eco-design principles (-84 percent chemicals and -53 percent water compared to conventional jeans) and tested for durability.
• Trace Me (Vitale Barberis Canonico/Quid). Shopping bag made from fabric recovered from traceable wool fibers, produced in Italy through fully traceable production steps and assembled by an Italian social enterprise.
• Repairing T-shirt (Oscalito/Albini Group/Crule). T-shirt made of organic cotton yarn and patches made of recycled fabric with reclaimed materials, fully traceable from the cotton field to the store. Designed through collaboration with a young designer to last a long time you can repair it with a replacement patch or ask the store for creative mending service.
• What if bag (OVS/RadiciGroup/Quid). Made from a single fabric, 100 percent recycled polyamide 6, certified by GRS it is fully recyclable by virtue of the material's thermoplasticity.
• Component shoe (Candiani Denim/Vibram). Made using only five components, this shoe can be assembled at home. The upper is made from recycled cotton denim, the sole is made from FSC-certified natural materials, and there is a lace made from a blend of cotton and TENCEL™ to join them.
• Soul (RadiciGroup/Save the Duck/Vibram). Bimaterial backpack composed of fabric made from 100% recycled polyamide yarn that is GRS certified and conforms to the Oeko-tex 100 standard for responsible manufacturing, and 100% recycled rubber from ISO-compliant factories.
• M-Pocket (Manteco/RadiciGroup). Recyclable tablet cases made from fabric production waste from industrialized processing. It can be made of recycled virgin wool and/or by-product from Manteco and virgin or recycled polyamide from RadiciGroup, depending on production.

Finally, Temera provided a digital voice for the pilot projects, sharing information accessible by scanning QR codes.

In light of the Report's findings, the Monitor for Circular Fashion suggests some priority actions for companies that want to pioneer the circular transition in the fashion industry:

• Implement eco-design principles and measure them through KPIs
• Develop a common traceability and transparency standard for reliable sustainability claims as an anti-greenwashing function
• Scale-up circularity through technological innovation to accelerate the transition
• Scale-up innovation through collaboration

New value chains will be explored in the coming months and years to cover all value chains in the Textile, Apparel, Leather and Footwear sector step by step.

Companies can be invited to participate in the Monitor for Circular Fashion if they meet the following criteria:

• sustainability reporting system aligned with a national or international standard;
• availability of governance for sustainability management;
• Alignment with the 2030 Agenda goals with periodic measurements.

The research methodologies

The research accomplished by the Monitor for Circular Fashion integrated two different methodologies:

• The SDA Bocconi research team identified over 40 KPIs specific to the fashion industry and collected primary and secondary data related to companies in the community through desk research, online surveys, and semi-structured interviews. The responses were analyzed using qualitative methods by the SDA Bocconi Sustainability Lab to draw a framework of indicators based on shared definitions and units of measurement. The KPI Committee validated and refined the list of KPIs and suggested some measurement guidelines. Monitor partners discussed these performance indicators by expressing the views of brands and their suppliers. Eco-design KPIs were added in 2022. The KPIs were tested through eight pilot projects and used to substantiate the sustainability claims chosen for each pilot project, with careful vetting done on several occasions by the Monitor for Circular Fashion Legal Advisor, the SDA Bocconi research team, the Sustainability Claims Task Force, and the KPI Committee. Semi-structured interviews with partners were conducted by the SDA Bocconi research team to select KPIs and sustainability claims. The field analysis was complemented by a survey conducted in collaboration with PwC on the factors influencing the perceived greenwashing in fashion, a survey and semi-structured interviews on the role played by collaboration between small and large enterprises in the scale-up of circular innovations, and a survey on eco-design principles in packaging conducted in collaboration with Bip. Desk analysis and interviews with service providers (Dedagroup Stealth, Temera and PLM Impianti) from the Monitor for Circular Fashion and further input led to the table summarizing the main opportunities and challenges related to the introduction of the Digital Product Passport (DPP).

• The "Circular Economy Report" is an Enel X solution based on an Accredia-accredited methodology that can identify an organization's level of circular maturity and propose a roadmap of innovative and sustainable solutions that can support the company on a path to decarbonization and sustainability. The methodology, based on more than 70 KPIs, has two levels of analysis: Corporate and Energy Site. The Corporate analysis aims to assess a company's strategic approach to the circular economy and how the core principles are embedded in organizational processes and day-to-day business. The analysis also provides an overview of the UN Sustainable Development Goals that are impacted by projects, initiatives or objectives carried out as part of business activities. The Energy Site analysis, on the other hand, represents a technical insight into the energy performance of a specific site (e.g., administrative headquarters, manufacturing site, warehouse, retail outlet, etc.). The areas of this level of analysis assess energy sources and energy consumption systems, energy efficiency and energy management solutions in place, and services and solutions that enable a more circular energy and economy. In order to measure the KPIs underlying the Corporate and Energy Site analysis, two surveys are submitted to companies with qualitative and quantitative questions designed both to gather information for the survey and to define and balance KPI weights.